a healthy way of life nacds a healthy way of life

A Healthy Way Of Life

NACDS



Natural Personal Care


Natural Personal Care products are experiencing tremendous growth with a 65% increase versus last year.

Increasing awareness of type and quality of ingredients has encouraged consumers to seek out more natural, organic and ecologically minded products.

Trend toward individuality and products that reflect consumer’s values and attitudes

Skin Care currently accounts for 60% of Natural dollar sales, although growth is evident across all product types indicating the depth of consumer’s interest in natural products.

Successful natural brands support products with eco-conscious packaging, a company wide commitment to sustainability and a “green” lifestyle

Over 40% of the population participates in LOHAS (Lifestyles of Health and Sustainability) while 60% of consumers are more likely to purchase products from a company that is “mindful of their impact on the environment and society” and use recycled and recyclable packaging*

*NMI Institute “Hot Consumer Tren ds 2007”


Natural Personal Care SPINS

Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg

TOTAL US

SKIN CARE $10,048,608 (0.6%) $31,179,157 0.5% $60,698,058 6.7% $132,470,407 10.0%

SOAP & BATH PREPARATIONS $5,232,112 (2.2%) $17,117,235 0.6% $33,638,188 4.6% $70,395,497 10.1%

HAIR PRODUCTS $5,118,213 5.4% $15,277,961 7.3% $30,360,008 9.9% $64,383,909 12.4%

ORAL CARE $3,284,529 1.2% $9,947,692 2.4% $19,682,845 4.9% $41,805,921 8.4%

PERSONAL CARE & FIRST AID $2,741,235 0.4% $8,206,983 0.8% $15,867,928 4.4% $33,682,190 7.7%

DEODORANTS $1,221,108 (2.8%) $3,705,931 (3.5%) $7,481,715 1.3% $16,987,916 7.5%

COSMETICS & BEAUTY AIDS $995,817 (20.9%) $3,181,869 (15.5%) $6,856,115 (5.2%) $15,214,767 4.8%$28,641,621 (0.5%) $88,616,829 1.0% $174,584,857 5.7% $374,940,606 9.7%

Current 52 WeeksCurrent 24 WeeksCurrent Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg

TOTAL US

SKIN CARE $10,048,608 (0.6%) $31,179,157 0.5% $60,698,058 6.7% $132,470,407 10.0%


HAIR PRODUCTS $5,118,213 5.4% $15,277,961 7.3% $30,360,008 9.9% $64,383,909 12.4%

ORAL CARE $3,284,529 1.2% $9,947,692 2.4% $19,682,845 4.9% $41,805,921 8.4%


DEODORANTS $1,221,108 (2.8%) $3,705,931 (3.5%) $7,481,715 1.3% $16,987,916 7.5%

COSMETICS & BEAUTY AIDS $995,817 (20.9%) $3,181,869 (15.5%) $6,856,115 (5.2%) $15,214,767 4.8%

TOTAL (COSMETICS & BEAUTY AIDS, DEODORANTS, HAIR PRODUCTS, ORAL CARE, PERSONAL CARE & FIRST AID, SKIN CARE, SOAP & BATH PREPARATIONS)$28,641,621 (0.5%) $88,616,829 1.0% $174,584,857 5.7% $374,940,606 9.7%

Category is showing steady increases at 52 weeks +9.7% overall.

Hair Care is the fastest growing category, while Skin Care is the largest.

*SPINS Scan 52 weeks ending 2-24-07

Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg

TOTAL US

SKIN CARE $10,048,608 (0.6%) $31,179,157 0.5% $60,698,058 6.7% $132,470,407 10.0%


HAIR PRODUCTS $5,118,213 5.4% $15,277,961 7.3% $30,360,008 9.9% $64,383,909 12.4%

ORAL CARE $3,284,529 1.2% $9,947,692 2.4% $19,682,845 4.9% $41,805,921 8.4%


DEODORANTS $1,221,108 (2.8%) $3,705,931 (3.5%) $7,481,715 1.3% $16,987,916 7.5%

COSMETICS & BEAUTY AIDS $995,817 (20.9%) $3,181,869 (15.5%) $6,856,115 (5.2%) $15,214,767 4.8%

TOTAL (COSMETICS & BEAUTY AIDS, DEODORANTS, HAIR PRODUCTS, ORAL CARE, PERSONAL CARE & FIRST AID, SKIN CARE, SOAP & BATH PREPARATIONS)$28,641,621 (0.5%) $88,616,829 1.0% $174,584,857 5.7% $374,940,606 9.7%


The $52.5 MM Naturals Category Is Experiencing Tremendous Growth Across Product Type

Naturals Skin Care/Hair Care/Bath&Body Dollar Sales ($MM)

Total US FDMx

Skin Care, $31.360%

Hair Care, $10.119%

Bath&Body, $11.221%

Naturals Skin Care/Hair Care/Bath&Body Growth

65.5%

49.9%

82.5%

51.3%

41.1%

27.3%

Dollar Sales Volume* Sales

Skin Care

Hair Care

Bath&Body

*16oz Equivalents Source: IRI Infoscan – Latest 52 weeks ending 4/22/07


All Products Categories Offer Broad Opportunities for Growth

Skin Lotions Account For One Third Of Naturals Dollars

Naturals by Product TypeDollar Sales ($MM)

Total US FDMx

Skin Ltn, $17.032%

Face Clnsrs, $6.3

12%

Shampoo, $5.711%

Face Mstrizers,

$4.59%

Conditioner, $4.28%

Hand Soap, $3.97%

AO Liq Soap, $3.3

6%

BarSoap, $3.16%

FacAntiAg, $2.14%

AllOther, $2.45%

Naturals Type GrowthTotal US FDMx

47%

65%

79%

228%

100%

31%

97%104%

27%

12%

Dollar Sales

SknLtnsFcClnsrsShmpooFcMstrzrsCndtnrHndSpAOLiqSpBarSoapFcAntiAgAother

Source: IRI Infoscan – Latest 52 weeks ending 4/22/07All Other includes Bubble Bath, Suntan Lotions/Oils, Acne Treatments, Hair

Coloring, Sunscreen Insect Repellant, Hair Sprays, and Hand Sanitizers.


Armathpy/Oils3%

Oral Care8%

Personal Care/1st Aid

3%

Hair Products10%

Deodorants11%

Kits/Sets/Packs

11% Soap & Bath15%

Skin Care39%

Skin Care Contributes 39% Of The Growth Dollars To Natural Body Care In FDM

All but two of the Natural Body Care Categories are growing faster than the overall department growth of 19%.Skin Care, the #2 sales category, is contributing 39% of the growth dollars to the department equating to $14.3M

FDM - Natural Body CareShare of Growth Dollars

Source: SPINSscan Conventional / 52 Weeks Ending 8/12/06

Natural Body Care Category

$ % Chg

Dollar Chg ($M)

Share of Growth $

Natural Body Care 18.7% $37.0

Skin Care 33.5% $14.3 39%

Soap & Bath 30.7% $5.7 15%

Kits/Sets/Packs 91.1% $4.2 11%

Deodorants 34.6% $4.0 11%

Hair Products 41.5% $3.7 10%

Oral Care 6.9% $2.9 8%

Personal Care & First Aid 1.7% $1.1 3%

Aromatherapy & Body Oils 51.1% $1.1 3%

Cosmetics & Beauty Aids 29.5% $0.0 0%


The Hain Celestial Group Personal Care Overview



Why Hain Personal Care? Largest natural personal care company with 17% market share covering all

categories: Hair, Bath, Body, Baby, Skin and Oral.

Publicly traded on Nasdaq (HAIN)

Supports organizations with like-minded values such as the Breast Cancer Fund, Susan G Komen, PETA, Organic Trade Association, Campaign for Safe Cosmetics

ISO 9001 compliant manufacturer with OTC, FDA, Medical device and Organic licenses and in house Research & Development facility

Practices sustainability:

• Multiple Hain facilities are powered with renewable energy, including personal care distribution center and offices

• Hain Organic farms absorb over 192 million lbs of Carbon Dioxide annually. This is equivalent to offsetting the carbon emissions of 11,180 households, not using 9.9 million gallons of gasoline, and preserving 714 acres of forest from deforestation



Why Hain Personal Care? Supports retail partners with category and industry data, planogramming,

POP, in store merchandising and category management Leader in innovation and new product development Portfolio includes brands:

• Ranked #1 in Natural Personal Care Industry• Ranked #1 in Shaving • Ranked #1 in Sun Care• Ranked #1 and #2 in Body Wash• Ranked #1 in Facial Lotions*• Ranked #1 in Body Lotions• Ranked #2 in Toothpaste with the #1 selling sku• Ranked #2, #3, #4 in Skin Care* • Ranked #2 in Liquid Soap• Ranked #2 and #3 in Shampoo

A Healthy Way Of Life *SPINS Scan 52 wks Units ending 3-24-07


Brand PortfolioJASON Natural Products Trusted, leading natural brand offering a complete range of natural personal care

products including oral, hair, skin, bath, body care. Appeals to ingredient conscious consumers seeking safe, effective value priced, vegan natural products.

Top selling items in oral and bath & body care categories.Alba Botanica Offers natural skin, bath, body and hair care products that appeal to a young, fun,

energetic demographic seeking personal care products that provide an experiential exotic escape into nature.

Leading body lotion and skin care line in natural category.Avalon Organics Offers a complete range of Organic skin, bath, body and hair care products that

appeal to an environmentally, ingredient conscious, wellness focused demographic that supports consciousness in cosmetics.

Leading brand in facial lotions and skin care.



Naturally derived, minimally processed Proven safe and efficacious in cosmetic applications Sustainably harvested Our products are free of:

• Parabens• Sodium Lauryl/Laureth Sulfates• Mineral Oil, Lanolin, Petrolatum• Animal derived ingredients• Never tested on animals• Pthalates• Known carcinogens and harsh chemicals

Use non-natural ingredients when effective natural ingredients are not available List ingredients according to the International Nomenclature of Cosmetic Ingredients (INCI)

Ingredient Philosophy


Ingredient Philosophy

There are 4 types of ingredients in every personal care formulation:1. Functional Ingredients

o Provide specific, functional benefits. For example, NaPCA, Panthenol, Aloe, Cocoa Butter are good moisturizing agents. Decyl Glycoside, Sodium Cocoyl Glutamate are cleansing agents for Shampoos, Bath Products.

2. Structural Ingredientso Provide the delivery system and a specific product form such as gel, cream, lotion. These

ingredients include Xanthan gum, Glyceryl Stearate.3. Preservatives

o All water based cosmetic products are prone to microbial contamination and require preservatives to maintain their safety & effectiveness.

o There is no single preservative capable of offering effective protection against bacteria, molds and yeast. So, a combination of several preservatives must be used to ensure an effective preservative system.

4. Fragrance/Scent

Seek to create 3rd party certification for natural or adopt European regulations already in place. Standards must take into account the structure of personal care formulations and the reality that effective personal care products may require certain synthetically derived ingredients.


Product Philosophy

To create all natural personal care products that reflect our desire to experience a healthy, vital life at any age, and our commitment to building a sustainable, eco-conscious, green lifestyle.

To never compromise our integrity, or commitment to our ingredient philosophy.

To practice truth in labeling.


Strategic Vision

Create products and services that support A Healthy Way of Life Grow our brands organically and through acquisition of those brands that meet our strict ingredient and philosophical requirements Expand brand awareness and capture new consumers through measured, strategic expansion into additional channels of distribution and classes of trade Hold the #1 position in all categories we participate in Develop and build partnerships with key retailers that support Hain values and a commitment to the natural category


Wellness Trends In Personal Care

How To Profit From The Health And Beauty Crossover


$49B Natural Products Universe

SPINSscanConventional

38%

SPINSscanNatural

22%

All Other40%

NaturalB/C32%

Full Format<$2M7%

Other10%

Trader J oe's15%

Supps17%

Wal-Mart/ Club20%

2005 Total Natural Products Retail = $49.0B (+13.4%)

Source: Estimates by SPINS, ACNielsen, Nutrition Business Journal, Natural Foods Merchandiser (including UPC and non-UPC sales) for total U.S. products universe 2005

• Natural B/C Size Health Food stores:

– <$2mm ACV; Supplements >40% but <80% of store sales• Supplement stores:

– (GNC, Vitamin World, independents, etc.); >80% supp sales

• Other:

– Includes retailer self-classified as co-ops, specialty/gourmet, personal care (i.e., Body Shop, Garden Botanica, etc.), health clubs, herb shops, mall stands, gift shops, etc.

ShareShare

ChangeACV($B)

% Change

Locations

SPINSscan Natural 22% 0.3 $10.7 14.5% 968

SPINSscan Conventional 38% 1.8 18.6 19.1% 64,262

All Other 40% (2.1) 19.8 7.7% 37,576

Total 100% $49.1 13.4% 102,806


Health And Wellness Increasingly Involves A Crossover With Beauty And Personal Care More Generally

77% of European and US consumers overall agreed that “good grooming and hygiene are just as important as diet, nutrition and exercise in achieving a sense of wellness/wellbeing”

The idea of nutrition for the skin resonates - 42% of Datamonitor’s consumer survey respondents agreed that “skincare products provide nutrition for the skin in the way that food and drinks provide nutrition internally”

The line between medical and cosmetic application has also become blurred e.g. oral care

Source: Datamonitor Consumer Survey


Wellness Concerns Are Fuelling The Growth Of Natural Personal Care

Double digit growth in both Europe and the US - growing concern about what they’re taking in internally is leading some consumers to examine what they’re applying topically and vice versa.

51% of European and US consumers overall feel that “natural ingredient based skincare and personal hygiene products are healthier and better” .

60% “associate natural products with wellness/wellbeing more than unnatural equivalents”.

Also natural is a word consumers feel comfortable in choosing to describe their looks. Dove’s ‘The Real Truth About Beauty’ research highlight that, “by an overwhelming majority, women around the world are most comfortable using the words ‘natural’ (31%) or ‘average’ (29%) to describe their looks” .


“Vice president, marketing and merchandising, L’Occitane en Provence, Manosque, France, quoted on www.happi.com, January 2006


Beauty Products Are Second Most Common Point Of Entry To Organics

0

10

20

30

40

50%

Produce

40%

BeautyProducts

15%

Dairy

8% 7% 6%

Cereal

4%

Box &BaggedFoods

4%

BakeryI tems

4%

BulkFood

2% 2% 2% 2%

FrozenFoods

2%

NutritionalSuppl.

Homeo-pathic

Remedies

Beverage HouseholdCleaners

Meat

Source: SRG Quantitative Research July 2006

First Category In Which Organic Products Were Purchased


52%

46%

38%

29%

24%22%

15%13%

0%

10%

20%

30%

40%

50%

60%

% o

f re

sp

on

de

nts

who

stat

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ighl

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Certain Categories Are More Associated With Wellness


$13.2$14.7

$16.9

2 Year Ago Year Ago Current

$4.3$4.9

$5.6

2 Year Ago Year Ago Current

Food / Drug / Mass ($B) Natural Supermarkets ($B)

+15%+12% +12%

+15%

Source: SPINScan Natural & Conventional 52 Weeks Ending 8/12/06

* Includes UPC coded natural, organic, H&W food, beverage, supplements, body care, and GM. Excludes Private Label except for supplements.

Natural, Organic and Health & Wellness Products* Are Experiencing 15% Growth


All Of The Well Developed Natural Body Care Markets In FDM, Except For San Antonio, Also Have a Strong BDI For Both Avalon

Organics And Alba Botanica

Source: SPINSscan Conventional / 52 Weeks Ending 8/12/06

*Strong CDI / BDI for Conventional marketsis defined as an index of 110 or greater

A Healthy Way Of Life Source: US Census Data, SRG Quantitative Research July 2006 and Hartman Group – Who’s Buying Organic? Demographics 2006

• Research estimates that the percentage of U.S. households using organic products is about 70% - 73%, up 17% from 2004.

Organic Using Households – 45M

Total US Households Containing an Adult Female – 64M of 110M total

45 Million Households Buying Organics

A Healthy Way Of Life Source: SRG Quantitative Research July 2006 and Hartman Group – Who’s Buying Organic? Demographics 2006

• 30 million (66%) households regularly, or occasionally using organic NPC

HH Using Organic NPC – 30M

Regular Use of Organics


Top Three Reasons To Buy Organic

Food Household Cleaners Beauty Products

Lack of Chemicals65%

Lack of Chemicals 55%

Lack of Chemicals54%

Product Quality31%

Environmental Concerned41%

No Testing on Animals33%

Safer for Children22%

Safer for Children30%

Allergy Concerns25%

• Lack of Chemicals is the key reason to buy across food, household cleaners and beauty products.

Why Buy Organics?


The Strong Growth as a Percentage of Sales of Several Natural Body Care Categories Could Indicate a Possible Emerging Growth Trend

For The Department

91%

70%

51%

49%

42%

41%

39%

37%

36%

Shelf Stable Meats Poultry & Seafood

Bodycare Kits & Sets & Travel Packs

Gen Merchandise - Personal Care

Aromatherapy & Body Oils

Sports Nutrition

Hair Products

Pet Food & Pet Care

Shelf Stable Fruits & Vegetables

Soup

Shelf Stable Pastas

747%

Source: SPINSscan Conventional52 Weeks Ending 8/12/06

Top % Growth Categories – All Departments - FDM


Creating A Destination

Build trust among guests that Target is committed to LOHAS through corporate Initiatives and supporting brands that reflect this philosophy Keys to building this trust:

o Team member, consumer training and education • Hain can support this initiative with highly educated staff and over 35 skin care specialists & demo reps in our Training & Education Dept • Simple, straightforward product education manuals available with key ingredients and 3 main benefits of each product• Flash cards by product for quick, easy reference

o Cross promote & merchandise with other natural/organic categories in the storeo Create events to promote & communicate Target’s commitment to LOHAS

• Earth Day• Organic Month, Fair Trade Month

Differentiated set that effectively communicates natural ingredient philosophy, environmental stewardship and sustainability


Summary

The Hain Celestial Group is a single source for the leading natural personal brands representing 17% of total natural category sales Publicly traded, well funded, with high standards of integrity, process and quality Training & Education support program Partnership offers broad options for growth due to the following:

• Natural product availability has not reached full potential within a customer, and across customers. Encourage distribution in all stores.

•The breadth of products is not fully developed as some accounts are selective with which items they carry. Selling in the full line, across product categories, is ideal. If product acceptance is limited, push for Skin Care products first as they have the broadest consumer appeal.

• A dedicated “destination” for Natural Personal Care products can maximize potential sales.

• Capitalize on the growing interest and awareness of natural product benefits.

• Generate excitement in the category through innovative point of purchase vehicles, especially in stores with less than ideal shelf placement.


Project Green Space

a healthy way of life nacds a healthy way of life

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hain personal care

oral care

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healthy way of life

natural body care categories

attitudes skin care

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